FY 2017 FINANCIAL RESULTS Milan February 27 th, 2018 1
AGENDA FY 2017 Highlights o o Group overview Results by business Financial results Appendix 2
Key Achievements of 2017 General Cable Acquisition Leadership in Submarine Expansion in Telecom High geographical and business complementarity. Multisource synergies. Worldwide leadership in cable industry enhanced. ~ 1bn order intake in 2017 Key contracts: - IFA2 (France-UK) - CNP-3 (Philippine) - RTE Offshore Wind (France) 3 connections. Double-digit organic growth in Optical Telecom business. Adj.EBITDA margin at record-high 17.0%. Contract awarded with Verizon preparing the 5G. 3
FY 2017 Financial Highlights Margin increase in core businesses Telecom and Energy Projects. Organic sales growth at -0.1%, with a positive trend in Q4 (+2.9%), supported by: - Double-digit progress in Optical & Connectivity. - Gradual recovery in E&I and Industrial. Adj. EBITDA at 733m (9.3% of sales), up from 711m driven by: - Telecom (17.0% Adj.EBITDA margin); - Energy Projects (17.8% Adj.EBITDA margin); Oman Cable (E&I) and forex main headwinds. Net Financial Debt at 436m, ( 537m in 2016) including approximately 100m cash-out related to shares buy-back, supported by strong focus on Net Working Capital efficiency. 4
FY 2017 Key Financials Euro Millions, % on Sales Sales Adjusted EBITDA (1) -0.1%* 9.4% 9.3% * Org. Growth Operative Net Working Capital (2) (1) Adjusted excluding restructuring, non-operating income/expenses and non-recurring income / expenses and cost for acquisition of General Cable; Net Financial Position 4.2% 1.9% (2) Defined as NWC excluding derivatives; % on annualized last quarter sales. 5
Continued profitability improvement Further margin expansion in Energy Projects and Telecom businesses. Adj. EBITDA Margin Adj. EBITDA ( million) / % Org. Growth FY 16 FY 17 15.9% 17.8% 14.0% 9.5% 7.9% 5.1% 4.0% 2.7% 3.4% 17.0% 9.4% 9.3% Energy Projects E&I Industrial & NWC. Oil&Gas Telecom Total FY 16 FY 17 ±X.X% = Sales Organic Trend -0.1% 711 733-4.8% -0.2% + 3.5% -10.8% + 5.3% 260 266 154 130 127 115 163 214 8 9 Energy Projects E&I Industrial & NWC. Oil&Gas Telecom Total 6
General Cable Acquisition Update of the transaction agenda Key Milestones of the Transaction December 4 th, 2017 Transaction Announcement February 16 th, 2018 General Cable EGM approved the acquisition by large majority (99% of total votes cast, also representing a majority of the total outstanding shares) Regulatory approvals By Q3-2018 Expected Closing 7
Capital Increase Key Highlights Prysmian s BoD has decided to request the forthcoming General Meeting for authorization to launch a capital increase up to 500 millions. The launch is conditioned to the completion of the General Cable transaction. Maximum Amount Timing (expected) Typology Object of the offer Purpose Guarantee 500 millions After closing of General Cable transaction Rights issue offer open to all shareholders Prysmian Spa ordinary shares Enhance financial flexibility Combined pro forma financial leverage 31-Dec-2017: 2.8x pre-capital increase, 2.3x post 500 millions capital increase and full conversion of the 2013 Convertible Bond Pool of primary financial institutions. 8
AGENDA FY 2017 Highlights o o Group overview Results by business Financial results Appendix 9
Energy Projects Euro Millions, % on Sales Sales + 18.5% * -4.8%* SUBMARINE Highlights Sound order intake in FY2017 of approximately 1 billion confirming the undisputed leadership in Submarine market. Strong tendering activity in the months ahead. Adj.EBITDA margin growth underpinned by the higher level of vertical integration in installation activity and sound execution. * Org. Growth Adj. EBITDA / % of Sales UNDERGROUND HIGH VOLTAGE Solid performance in South-East Asia and acceleration in the execution of turnkey projects in EMEA. Adj.EBITDA negatively affected by the change of perimeter in China. Positive performance in APAC and France offset by slight deterioration in the UK, Nordics and Russia. Orders Backlog Evolution ( m) Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Underground HV ~450 ~450 ~600 ~350 ~400 Submarine ~2,050 ~2,350 ~2,600 ~2,050 ~2,050 15.6% 15.9% 17.8% Group ~2,500 ~2,800 ~3,200 ~2,400 ~2,450 10
Energy & Infrastructure Euro Millions, % on Sales Sales Highlights -3.1%* -0.2% * TRADE & INSTALLERS Significant organic recovery in H2, also benefitting from CPR introduction which positively impacted performance in some European countries (Italy, Spain, Netherlands and the Nordics). Weakness in Middle-East (Oman) main drag of profitability * Org. Growth POWER DISTRIBUTION Soft organic growth, recovering in Q4, impacted by weakness in Central-Eastern Europe (Germany), UK and Middle-east. Positive trend in North America and APAC. Profitability affected by Middle East weakness. Adj. EBITDA / % of Sales Quarterly Adj.EBITDA and Organic Growth Evolution * Adj.EBITDA excluding OCI 100 Adj.EBITDA excl. OCI Series3 Adj.EBITDA OCI Contribution Organic Growth 10% 113* 102* 100* 4.6% 5.1% 4.0% 80 60 40 20 0 49 38 39 15 36 31 35 33 16 8 9 34 13 12 5 23 28 30 28 4 22 23 18 19 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 0% -10% -20% -30% 11
Industrial & Network Components Euro Millions, % on Sales Sales Highlights -4.6%* + 3.5% * Specialties, OEMs & Renewables Positive organic growth, improving in Q4 thanks to solid trend in Railways and Infrastructure, partially offset by the slowdown in Renewables, Defense and Crane. Adverse mix effect impacting Adj.EBITDA margin. Positive trend in North America, Turkey, Nordics and APAC. Order book closed the year at high level, supported by solid demand in Australia and North America. Elevator Slight organic increase, led by solid volume growth in Europe, more than offsetting the negative trend in China. * Org. Growth Adj. EBITDA / % of Sales Profitability negatively affected by unfavourable sales mix in the US, volume slowdown in China and negative forex impact. Automotive Double-digit growth driven by sound market demand and increase of market share in North America, APAC and Brazil. Adj.EBITDA benefitted from footprint optimization in Europe and volume increase effect. Network Components 8.1% 9.5% 7.9% Low single-digit organic decrease, mainly driven by the weakness of HV, partially offset by the positive performance in MV and LV accessories in UK and US. Adj.EBITDA impacted by slowdown of HV. 12
Oil & Gas Euro Millions, % on Sales -29.3%* Sales -10.8%* SURF Highlights Umbilical: volume and margin decline due to low level of order intake in 2016 and price pressure. Brazil market conditions remain highly competitive. DHT: moderate reduction due to low level of activity in international & offshore markets, partially offset by the recovery of shale activity in the US. Core Oil&Gas Cables Volume recovery in onshore projects mainly driven by higher demand in Middle East, Russia and US drilling. Offshore activity still subdued. * Org. Growth Adj. EBITDA / % of Sales Adj.EBITDA improved over the year, supported by volume recovery, footprint synergies and ongoing design-to-cost initiatives. Quarterly organic growth* evolution 49.2% 33.4% 3.8% 2.7% 3.4% -3.4% -7.6% -9.2% -4.3% -21.7% -20.9% -24.8% -21.2% -33.9% -33.9% Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 * % change vs. same quarter of previous year 13
Telecom Euro Millions, % on Sales + 8.5% * Sales + 5.3% * Telecom Solutions & Fibre Highlights Optical business expanded double-digit organically supported by the favorable market environment, driven by fixed broadband expansion and investments preparing the 5G. Main growth areas were Europe (France and Italy in particular) and North America. Copper business weakness mainly related to the phase out of NBN project in Australia, in line with expectations. Adj.EBITDA margin benefitted from the increasing volumes, investments in fibre manufacturing efficiency and capacity, rump-up of cable volumes in Romania and the contribution of YOFC. * Org. Growth Adj. EBITDA / % of Sales Recent optical cable tender issued by China Mobile increases visibility for sustainable market expansion also in 2018. Quarterly LTM Adj.EBITDA and % on LTM Sales * 2016 Adj.EBITDA includes 8m bad debt provision in Brazil * 20% 18% 16% 14% 12% 100 LTM Adj.Ebitda 116 126 144 146 % on LTM Sales 134 147 141 157 163 174 194 201 214 250 200 150 100 12.1% 14.0% 17.0% 10% 8% 50 - * Adj.EBITDA including 8m bad debt provision in Brazil 14
AGENDA FY 2017 Highlights o o Group overview Results by business Financial results Appendix 15
Profit and Loss Statement Euro Millions FY 2017 FY 2016 Sales 7,901 7,567 YoY total growth 4.4% 2.8% YoY organic growth (0.1%) 1.0% Adj.EBITDA 733 711 % on sales 9.3% 9.4% Adjustments (76) (66) EBITDA 657 645 % on sales 8.3% 8.5% Adj.EBIT 556 538 % on sales 7.0% 7.1% Adjustments (76) (66) Special items (59) (25) EBIT 421 447 % on sales 5.3% 5.9% Financial charges (116) (79) EBT 305 368 % on sales 3.9% 4.9% Taxes (82) (106) % on EBT (27.0%) (28.8%) Net income 223 262 % on sales 2.8% 3.5% Minorities (4) 16 Group Net Income 227 246 % on sales 2.9% 3.3% 16
Adjustments and Special Items on EBIT Euro Millions FY 2017 FY 2016 Non-recurring Items (Antitrust investigation) (18) 1 Restructuring (30) (50) Acquisition General Cable (16) - Other Non-operating Income / (Expenses) (12) (17) EBITDA adjustments (76) (66) Special items (59) (25) Gain/(loss) on metal derivatives 12 54 Assets impairment (22) (30) Other (49) (49) EBIT adjustments (135) (91) 17
Financial Charges Euro Millions FY 2017 FY 2016 Net interest expenses (70) (62) of which non-cash conv.bond interest exp. (17) (8) Bank fees amortization (5) (4) Gain/(loss) on exchange effect (5) - Hedging costs (15) (12) Hedging costs for GC acquisition (17) - Non recurring effects (2) (2) Other non operating financial expenses (2) - Other - 1 Net financial charges (116) (79) 18
Statement of financial position (Balance Sheet) Euro Millions 31 Dec 2017 31 Dec 2016 Net fixed assets 2,610 2,630 of which: goodwill 438 448 of which: intangible assets 297 344 of which: property, plants & equipment 1,646 1,631 Net working capital 178 325 of which: derivatives assets/(liabilities) 22 7 of which: Operative Net working capital 156 318 Provisions & deferred taxes (322) (360) Net Capital Employed 2,466 2,595 Employee provisions 355 383 Shareholders' equity 1,675 1,675 of which: attributable to minority interest 188 227 Net financial debt 436 537 Total Financing and Equity 2,466 2,595 19
Cash Flow Euro Millions FY 2017 FY 2016 Adj.EBITDA 733 711 Adjustments (76) (66) EBITDA 657 645 Net Change in provisions & others (2) - Share of income from investments in op.activities (42) (31) Cash flow from operations (before WC changes) 613 614 Working Capital changes 88 67 Dividends received 10 10 Paid Income Taxes (104) (76) Cash flow from operations 607 615 Acquisitions/Disposals (7) 31 Net Operative CAPEX (254) (227) of which acquisitions of assets of ShenHuan (35) (11) Free Cash Flow (unlevered) 346 419 Financial charges (70) (68) Free Cash Flow (levered) 276 351 Free Cash Flow (levered) excl. Acquisitions & Disposals* 318 331 Dividends (101) (102) Treasury shares buy-back & other equity movements (97) - Net Cash Flow 78 249 Net Financial debt beginning of the period (537) (750) Net cash flow 78 249 Equity component of convertible bond 48 - Conversion of convertible Bond 2013 17 - Other variations (42) (36) Net Financial debt end of the period (436) (537) *Calculated af FCF (levered) excluding "acquisitions of assets of ShenHuan" and "Acquisition & Disposal". 20
Dividend proposal Dividend proposed to the forthcoming Shareholders Meeting Dividend Per Share 0.43 Ex-dividend date: 23 April 2018 Record date: 24 April 2018 Payment date: 25 April 2018 Dividend Yield (1) 1.6% DPS evolution (Euro per share) Draka acquisition 0.417 0.417 0.417 0.42 0.42 0.42 0.42 0.43 0.43 0.166 0.210 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (1) Based on 2017 average price ( 26.31). 21
AGENDA FY 2017 Highlights o o Group overview Results by business Financial results Appendix 22
Prysmian group at a glance FY 2017 Financial Results Sales breakdown by business Sales breakdown by geography 7,901m 7,901m Energy Products 62% Adj. EBITDA by business Adj. EBITDA margin 17.8% 17.0% 733 m 7.9% 9.3% 4.0% 3.4% Energy Projects E&I Industrial & Netw. Comp. Oil&Gas Telecom Total 23
Energy Projects FY2017 sales breakdown Sales breakdown by business Sales breakdown by geography 1,490m 1,490 m 24
E&I FY2017 sales breakdown Sales breakdown by business Sales breakdown by geography 3,271 m 3,271 m 25
Industrial & Network Components FY2017 sales breakdown Sales breakdown by business Sales breakdown by geography 1,460 m 1,460m 26
Oil & Gas FY2017 sales breakdown Sales breakdown by business Sales breakdown by geography 273 m 273 m 27
Telecom FY2017 sales breakdown Sales breakdown by business Sales breakdown by geography 1,258 m 1,258 m 28
Bridge Consolidated Sales Euro Millions Energy Projects E&I Industrial & NWC ( 78 ) 9 ( 15 ) ( 60 ) ( 6 ) 335 ( 74 ) ( 32 ) 102 47 1,634 Org.growth -4.8% 1,490 1,490 3,016 Org.growth -0.2% 3,271 1,343 Org.growth +3.5% 1,460 Oil & Gas Telecom Total Consolidated ( 33 ) 13 ( 7 ) 62 25 ( 8 ) 15 ( 8 ) 525 ( 138 ) ( 45 ) 300 Org.growth -10.8% 273 1,164 Org.growth +5.3% 1,243 1,258 7,567 Org.growth -0.1% 7,901 7,901 29
Profit and Loss Statement Euro Millions FY 2017 FY 2016 Sales 7,901 7,567 YoY total growth 4.4% 2.8% YoY organic growth (0.1%) 1.0% Adj.EBITDA 733 711 % on sales 9.3% 9.4% of which share of net income 42 31 Adjustments (76) (66) EBITDA 657 645 % on sales 8.3% 8.5% Adj.EBIT 556 538 % on sales 7.0% 7.1% Adjustments (76) (66) Special items (59) (25) EBIT 421 447 % on sales 5.3% 5.9% Financial charges (116) (79) EBT 305 368 % on sales 3.9% 4.9% Taxes (82) (106) % on EBT (26.9%) (28.8%) Net income 223 262 % on sales 2.8% 3.5% Minorities (4) 16 Group Net Income 227 246 % on sales 2.9% 3.3% 30
Energy Projects Segment Profit and Loss Statement Euro Millions FY 2017 FY 2016 Sales to Third Parties 1,490 1,634 YoY total growth (8.8%) YoY organic growth (4.8%) Adj. EBITDA 266 260 % on sales 17.8% 15.9% Adj. EBIT 225 224 % on sales 15.1% 13.7% 31
Energy Products Segment Profit and Loss Statement Euro Millions Sales to Third Parties Adj. EBITDA Adj. EBIT FY 2017 FY 2016 E&I 3,271 3,016 YoY total growth 8.5% YoY organic growth (0.2%) Industrial & Netw. Comp. 1,460 1,343 YoY total growth 8.8% YoY organic growth 3.5% Other 149 110 YoY total growth 34.8% YoY organic growth 0.0% ENERGY PRODUCTS 4,880 4,469 YoY total growth 9.2% YoY organic growth 0.9% E&I 130 154 % on sales 4.0% 5.1% Industrial & Netw. Comp. 115 127 % on sales 7.9% 9.5% Other (1) (1) % on sales (0.8%) (0.8%) ENERGY PRODUCTS 244 280 % on sales 5.0% 6.3% E&I 73 92 % on sales 2.2% 3.0% Industrial & Netw. Comp. 95 108 % on sales 6.5% 8.0% Other (3) (2) % on sales (1.9%) (1.9%) ENERGY PRODUCTS 165 198 % on sales 3.4% 4.4% 32
Oil&Gas Segment Profit and Loss Statement Euro Millions FY 2017 FY 2016 Sales to Third Parties 273 300 YoY total growth (9.0%) YoY organic growth (10.8%) Adj. EBITDA 9 8 % on sales 3.4% 2.7% Adj. EBIT (7) (7) % on sales (2.5%) (2.4%) 33
Telecom Segment Profit and Loss Statement Euro Millions FY 2017 FY 2016 Sales to Third Parties 1,258 1,164 YoY total growth 8.1% YoY organic growth 5.3% Adj. EBITDA 214 163 % on sales 17.0% 14.0% Adj. EBIT 173 123 % on sales 13.8% 10.6% 34
IFRS 15 New International Standard that regulates revenue recognition. Key Highlights & Impact Effective for annual periods beginning after 1 st January 2018; Prysmian Group will apply the IFRS 15 standard using the full retrospective method; The implementation of IFRS 15 standard will not have significant impacts; The implementation of the above mentioned standard will not have significant impacts also for Energy Projects. The current accounting methodology in revenue recognition is already substantially compliant with the new standard, and as such its application is confirmed, except for what highlighted below: Balance Sheet Effect Group net equity as of 1st January 2017 will be restated for the implementation of IFRS 15, by decreasing of approximately 36 millions, net of taxes; No effect on 2017 P&L; The effect is due to the deferral of past revenues already recognized in Energy Projects business triggered by guarantees extensions; 35
Reference Scenario Commodities & Forex Brent Copper Aluminium 150 Brent $/bbl Brent /bbl 12,000 Copper $/ton Copper /ton 3,500 Aluminium $/ton Aluminium /ton 125 10,000 3,000 100 75 50 25 08 09 10 11 12 13 14 15 16 17 8,000 6,000 4,000 2,000 08 09 10 11 12 13 14 15 16 17 2,500 2,000 1,500 1,000 500 08091011121314151617 EUR / USD EUR / GBP EUR / BRL 1.60 1.50 1.40 1.30 1.20 1.10 1.00 08 09 10 11 Based on monthly average data Source: Nasdaq OMX 12 13 14 15 16 17 0.95 0.90 0.85 0.80 0.75 0.70 08 09 10 11 12 13 14 15 16 17 4.50 4.00 3.50 3.00 2.50 2.00 08 09 10 11 12 13 14 15 16 17 36
Disclaimer The managers responsible for preparing the company's financial reports, A.Bott and C.Soprano, declare, pursuant to paragraph 2 of Article 154-bis of the Consolidated Financial Act, that the accounting information contained in this presentation corresponds to the results documented in the books, accounting and other records of the company. Certain information included in this document is forward looking and is subject to important risks and uncertainties that could cause actual results to differ materially. The Company's businesses include its Energy Projects, Energy Products and Telecom Operating Segments, and its outlook is predominantly based on its interpretation of what it considers to be the key economic factors affecting these businesses. Any estimates or forward-looking statements contained in this document are referred to the current date and, therefore, any of the assumptions underlying this document or any of the circumstances or data mentioned in this document may change. Prysmian S.p.A. expressly disclaims and does not assume any liability in connection with any inaccuracies in any of these estimates or forward-looking statements or in connection with any use by any third party of such estimates or forward-looking statements. This document does not represent investment advice or a recommendation for the purchase or sale of financial products and/or of any kind of financial services. Finally, this document does not represent an investment solicitation in Italy, pursuant to Section 1, letter (t) of Legislative Decree no. 58 of February 24, 1998, or in any other country or state. In addition to the standard financial reporting formats and indicators required under IFRS, this document contains a number of reclassified tables and alternative performance indicators. The purpose is to help users better evaluate the Group's economic and financial performance. However, these tables and indicators should not be treated as a substitute for the standard ones required by IFRS. 37